01/08/09, 01:03:36 UTC

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Lebanon's national airline posts US$39 million net profit in 2006 despite Hezbollah-Israel conflict

iht.com

BEIRUT, Lebanon: Lebanon's national carrier, Middle East Airlines, recorded a US$39 million net profit in 2006 despite the blockade of Beirut airport and disruptions during the conflict between Hezbollah and Israel, the company's chairman announced Wednesday.

MEA Chairman Mohammed Hout said net profits would have been nearly twice as high if the war had not occurred and were down from US$61.4 million in 2005.

"Had the situation been normal in Lebanon, we would have achieved profits of between US$70 and US$75 million," he said.

The airline incurred losses of US$45 million during the July 12-Aug. 14 conflict, compensating for it with profitable periods in the first few months of the year and after Israel ended the blockade of the airport on Sept. 7, according to the MEA chairman.

The Jewish state continued the blockade for several months after the end of the war, saying it was necessary to prevent Hezbollah guerrillas from rearming. During the siege, MEA had to fly to nearby countries and at one point was only allowed into Beirut by making stopovers in Jordan.

Hout said he expects the company to record net profits in 2007 despite difficult political conditions in the country. Lebanon is in the midst of a deep political crisis between the Western-backed government and the Hezbollah-led opposition. The dispute is centered in the coming weeks on electing a new president, with fears that failure to reach a compromise could lead to competing governments, throwing the country into even greater political chaos.

The MEA chairman said 2007 net profits could exceed US$45 million if politicians reach an agreement but would not predict what results would be if the political environment deteriorates.

MEA was one of the first airlines to operate in the Middle East. During the 1975-90 civil war, the privately owned company went into debt and was forced to borrow heavily from the government to stay afloat. The Bank of Lebanon, the nation's central bank, currently holds 99 percent of its shares.

Hout said the airline plans to buy 10 new planes by 2010, raising the number owned by the company to 16. The carrier currently rents three jets but plans to return them once the new planes are delivered, he added.

 Printable Version  | published Oct 10, 2007